Akademik Veri Yönetim Sistemi
International Journal of Environmental Science and Technology, cilt.21, sa.13, ss.8403-8416, 2024 (SCI-Expanded)
Questions surrounding the kind of foreign direct investment that Pakistan attracts become important, especially with the unending debates that such investment can pose environmental challenges for the nation in particular and the world at large. While investment inflows are a prerequisite for economic growth, the environmental consequences are also vital for the quality of life of citizens. This study thus contributes to the debate on the trade-off between cross-border investment flows and environmental status in Pakistan, using annual time-series data spanning 1971–2018. The dynamic connection between foreign direct investment and ecological efficiency is scrutinized while controlling for the effects of environmental determinants—financial integration, economic growth, energy intensity and international trade—by employing dynamic autoregressive distributed lag simulations. The estimated elasticities as well as the counterfactual simulations show that even if ecological efficiency is used as the alternative measure of environmental performance within a dynamic framework, the pollution haven hypothesis still holds in Pakistan. Moroever, while economic growth, financial integration and international trade promote ecological efficiency, energy intensity condenses it. The robustness checks conducted using multivariate Quantle and Quantitle-on-Quantile Regressions also provide similar outcomes to that of the dynamic autoregressive distributed lag simulations.